Documente Academic
Documente Profesional
Documente Cultură
Krisnah Poinasamy
Oxfam GB
November 2011
www.oxfam.org.uk
Contents
Summary ........................................................................................................................... 4
Discussion ......................................................................................................................... 5
3. Ensuring adequate labour rights and that labour rights are effectively enforced
................................................................................................................................... 27
4. Ensure adequate progression reducing the gap between good jobs and bad
jobs ............................................................................................................................ 30
Notes ................................................................................................................................ 33
This paper is a discussion of some of the issues that Oxfams work in this area
has revealed. It is not a comprehensive overview nor does it list policy solutions.
Instead it is a contribution to the emerging debate that is challenging the
consensus, and Oxfam will seek with others to identify what solutions could help
us all achieve our ambition of decent work for everyone.
Our ambition for a world without poverty is one with decent work; work that
serves the needs of people, communities, and the economy. Decent work means
that everyone has an adequate and stable income; everyone is protected from
exploitation; and everyone has security and power over their own lives through
fair labour rights.
Finally, the cost to business and to the economy is significant, with more fragile
domestic demand as millions of people are simply unable to afford goods and
services. Businesses that provide decent work have reported lower staff turnover
and higher levels of loyalty, better employee morale, lower costs (e.g. sick pay),
and higher productivity, while businesses paying below the Living Wage cost
society between 5.9bn and 6.3bn a year in extra benefit payments and lost
taxation effectively a form of corporate welfare. The blatant underuse and
underdevelopment of the skills, energy, ideas, and talents of large sections of the
population are missed opportunities to harness these capabilities to foster
development and economic growth.
Discussion
The cost of in-work poverty and the gains possible through decent work are so
significant that policy makers must start to consider their ambition in this area
and the routes through which these gains can be achieved. Clearly the solution is
not simply economic growth, as the structure of the economy has substantially
changed towards an hourglass jobs market, with good jobs and bad jobs but
few middle-tier jobs, and little opportunity for progression between them and it
is the sectors at the bottom of the jobs market where employment is set to grow.
Work should pay enough to live on. The National Minimum Wage
should be increased to a level which represents a Living Wage (a wage
that is considered to be enough to live on).
Social protection (the welfare and benefits system in the UK) should
provide an adequate safety-net. People who are unable to earn enough to
live on through employment should receive adequate additional support
through the welfare system to support them and their families.
With over 130 food banks, the Trussell Trust sees the problem at the sharp end. And we
are finding that a substantial proportion of our clients now come from working
households. It only takes your overtime being reduced, or only being able to get part-time
work, to push individuals and families over the edge. The stories we hear from our clients
provide clear evidence that theres an urgent need to address in-work poverty, as well as
out-of-work poverty. It is a real indictment that working people need to be referred to food
banks like ours for emergency help.
Chris Mould, Executive Chairman, the Trussell Trust
Oxfam believes that no one should live in poverty in the UK. It thinks that, in the
sixth richest country in the world,1 everyone should have enough to live on.
Work should enable people who have a job to earn a secure and dignified living.
And a lack of decent, secure jobs is one of the key barriers preventing
unemployed people from working.
Oxfams programme experience in the UK has repeatedly shown that most
people see having a good job as the best way to move out of poverty, whether
they are mothers from minority ethnic communities in Tyne and Wear,2 single
parents in Bristol,3 or people living on low incomes in Bradford.4 Our work with
grassroots communities, and with groups of workers from particular sectors,5 has
also shown us that people in poverty are often willing to work overtime, do
double shifts, be constantly on call, or work in two or three different places in
order to keep their jobs, and try to earn enough to get by.
Despite the willingness to work, and the flexibility, shown by so many people in
finding work, Oxfam also knows that many working adults such as John and
Natalie (see case study) simply do not earn enough to live on or support their
families. Some struggle to pay for adequate food and heating; some work long
hours in conditions which damage their health and well-being; many others can
never afford an outing or a holiday or cant cope with unexpected shocks such
as a broken boiler or cooker. Oxfam is grateful to the many people who have
shared their stories of working poverty, and their experiences are reflected in this
paper.
Oxfam has an ambition of decent work: where everyone who can work is able
to generate an adequate and stable income; where they are protected from
exploitation and given security by adequate labour rights; and where, over time,
they are able to progress to better-paid work. This vision is obviously pro-poor,
but in an economy that will be increasingly dependent on developing human
capital, it is also fundamentally pro-business. This paper aims to stimulate
Child poverty
Under the Child Poverty Act 2010, the government is legally committed to
ending child poverty by 2020. Yet 55 per cent of all children living in poverty in
the UK (1.5 million children) live in a family where at least one adult is in some
form of paid employment.7 It is a sobering truth that child poverty is more
common in working than in non-working households.8
Child poverty has clear human and financial costs. A wealth of evidence shows a
clear, causal link between income poverty and poorer outcomes for children
throughout their lives, in terms of educational attainment at foundation, primary,
and secondary school, on many health indicators, and in their future
employment prospects.9 Poor children are very likely to become poor adults,
who may themselves be trapped in low-paid work, and whose own children will
live in poverty. It is unlikely that the governments legally binding child poverty
targets will be met without significant efforts to reduce working poverty as well
as out-of-work poverty.
Health inequalities
The highly regarded Marmot Review10 on health inequalities clearly identifies
working conditions and employment as one of five key areas which contribute
to poor health outcomes for those on lower incomes and which have
quantifiable, and significant, human and economic costs. As Marmot outlines:
People currently dying prematurely because of health inequalities would
have enjoyed between 1.3 and 1.5 million extra years of productive life
as workers, consumers, carers, and family and community members.
More than three-quarters of the population do not have a disability-free
life expectancy as far as 68 the proposed pensionable age in the UK
making it unlikely that they will be able to work and ensuring that they
will require care from family and the National Health Service.
Health inequality in illness accounts for productivity losses of 3133bn
per year in lost taxes and higher welfare payments, and an additional cost
of 5.5bn a year to the NHS.
I work for an agency but Im self-employed. They pay me 2.29 per room. I cant clean
enough rooms to make the minimum wage. There is no sick pay or holiday pay. And I
have to buy my own cleaning materials and uniform from my wages.
Monica, cleaning hotels in London
There are many causes of in-work poverty and numerous factors which impact
on the phenomenon many of which interact with each other. This section looks
at the background context of the globalisation of the late 20th century and the
government employment policies that have responded to it over recent decades,
and then examine specific causes of working poverty today, including the
following factors: who you are; low pay; inadequate and inflexible social
protection; lack of labour rights; inadequate labour rights enforcement; and lack
of responsible employment.
A significant factor affecting working poverty is who you are: your gender,
nationality, ethnic identity, relationship status, even your age. Jobs seen as
female jobs, such as care work and cleaning, are commonly devalued and
underpaid and almost two-thirds (65 per cent) of low-paid workers are women
(2.6 million women are low-paid).28 Furthermore, womens paid work is often
taken on in addition to their unpaid caring responsibilities, which can limit the
type of work they can do and the number of hours they can work.29
Relationship status significantly affects your likelihood of experiencing working
poverty. Overall, single parents with dependent children face the highest risk: 19
per cent of single parents working full-time and 25 per cent of those working
part-time live in poverty.30 As 92 per cent of single parents are women, this again
increases the chances of women experiencing working poverty.
Oxfams research and programme experience shows that migrant workers are
also highly vulnerable to in-work poverty.31 Migrant workers face exploitation
due to factors such as language barriers, uncertainty about immigration status,
and the prevalence of employment via gangmasters and agencies in the sectors in
which they work. Such exploitation can include pressure to work excessive
hours, pay below the minimum wage, non-payment of sick and holiday pay, and
spurious deductions for work-related clothing or equipment.
People from some ethnic minority backgrounds are again more likely to
experience in-work poverty for a range of reasons, from discrimination by
employers to a lack of skills and training. Some fields of work most easily
accessible to black and minority ethnic (BME) workers for example, self-
employed taxi-driver, employment in restaurants and the hospitality industry,
etc. may demand very long hours, but at a very poor rate of return. Almost half
of all Bangladeshi and Pakistani employees earn less than 7 an hour, a higher
proportion than in any other ethnic group.32
The UK labour market has one of the highest rates of low pay in Europe, with 3.5
million people aged 22 to retirement paid below the low-pay threshold of 7 per
hour33 and almost three quarters (72 per cent) of the working poor in low-paid
employment.34 Low pay does not necessarily lead to in-work poverty, if there are
other, higher-paid workers in the household, for instance, or if the worker has
other assets (e.g. savings) to draw on. However, where this is not the case, low
pay is a significant cause of in-work poverty.
The sectors in which low-paid work is most prevalent will come as no surprise:
hospitality (69 per cent of all workers are low-paid), agriculture (42 per cent),
retail (44 per cent),35 and social care (19 per cent). Low-paid work is also
particularly prevalent amongst certain groups, e.g. single parents, BME workers.
Sadly, it is not the case that workers use low-paid jobs as stepping stones to
higher-paid work that helps them move out of poverty. Evidence from the British
Household Panel suggests that a large proportion of low-wage earners are not
moving up from the bottom of the pay distribution scale, even over relatively
In financial terms...
The National Minimum Wage is currently 6.08 an hour for workers aged 21 and over (while
the top 1 per cent of earners earn 43 an hour, and the top 10 per cent earn 21.30 an
hour).41 This is significantly short of 7.20 per hour, the recommended Living Wage outside
of London; let alone the London Living Wage of 8.30. The Living Wage is calculated as a
level of income needed to allow a minimum acceptable standard of living in the UK today.42
The Living Wage assumes that people claim all the benefits and tax credits to which they are
entitled.43
I wish I could work, but it isnt worth me working at all. I used to work. I was a cleaner.
But I cant earn enough to make it pay [for losing benefits]. And I would need to pay for
child care. It just does not add up.
Jenny, single mother
For those people unable to earn enough to get by because of illness or caring
responsibilities, or because better-paid or full-time work is not available, a safety-
net of social protection is vital to help them deal with fluctuations in income
week-to-week and to ensure that workers always have enough to live on.
Many countries, such as Denmark and Sweden, complement high levels of
labour market flexibility with policies that create security for workers in this way.
False self-employment
The status of self-employed affords no labour rights not even the National Minimum
Wage. Instead, self-employed people should normally negotiate their terms and
conditions with those for whom they provide services or labour. For many people, self-
employment is a genuine choice, which offers them flexibility about how, and how much,
they work. Some employers in low-paid sectors, where vulnerable workers have little
power, use false self-employment to avoid giving workers certain rights that they would
have as employees or workers, to avoid paying the NMW, and to make charges for
work-related expenses. Homeworkers, for example, are frequently classified as self-
employed, even though they usually receive all their work from a single factory, which
supplies the raw materials and equipment and sets a piece rate and tight timescales for
all the work that they do.
Citizens Advice reports that it deals with more cases involving denial of paid
holiday than it does cases of all other rights.54 These workers are nearly always
low-paid, with the majority being women, often working part-time. Evidently,
In the last century, many workers and employers adhered to the idea of a job for
life in which the employer had a responsibility to the employee, and the
employee was rewarded for loyalty and hard work in a particular company.
However, this idea has been eroded for some by the increase of flexibility:
workers and employers are no longer bound to each other in the same way and
the well-being of members of the labour force is often seen as someone elses
problem whether that of government or the individual rather than that of the
employer.
The lack of willingness amongst some employers to take responsibility to protect
their less-skilled workers and to help them progress contributes to in-work
poverty. Although short hours and short-term contracts suit many employers
(and some employees), others can use them to walk away from their
responsibilities, often subcontracting work to an agency; and this is particularly
the case with low-paid work such as cleaning and hospitality. Such agencies are
much less likely to invest in workers, making it harder for the working poor to go
on to get better-paid work in the future.
Some low-paid workers are also more likely to have low skills and social capital
(confidence, contacts, support networks, etc.)56 and to work for small firms with
limited opportunities for progression. The UK outspends almost every EU
country in helping unemployed people look for work, but spends very little on
training or employment support.57 This not only lets down employees but also
small-scale employers who want to grow their businesses and support their staff.
Lack of training and on-the-job progression opportunities mean that working
poverty can become a way of life. This is particularly true given the changing
nature of the labour market and the near disappearance of middle-tier jobs.
Work-based training
In a best case scenario, training and progression to better-quality work will occur
in the workplace, particularly as this involves less risk for the poorest workers.85
Though there has been consistent investment by businesses in training,86 this is
likely to be by larger firms. Small and medium enterprises (SMEs) are the least
likely to be able to afford investment in staff, and addressing the difficulties faced
by SMEs is crucial to eradicating working poverty. The axing of Train to Gain, an
initiative to deliver employer-led vocational training on the job, removes an
important tool for businesses to support work-based approaches to progression.
Alternative schemes to support businesses that would otherwise struggle to
provide training should be prioritised.